Overexposure in PT IBU Investigations May Lead to Government´s Embarrassment

Sunday, 30 July 2017 , 12:00:00 WIB - Economy

Minister of Trade Enggartiasto Lukita (in the middle) is seen talking to rice traders at the Pasar Induk Cipinang traditional market, Jakarta, Friday (28/7). (ANTARA)

JAKARTA, GRES.NEWS – The government may end up embarrassing themselves from the police raid against rice producer PT Indo Beras Unggul (IBU) for selling subsidized rice as premium rice and selling rice above the government’s maximum limit. The police may have difficulty proving their allegations.

Indonesian Entrepreneurs Association (Apindo) Team of Experts Head, Sutrisno Iwantono, the raid and allegations has resulted in business uncertainty for farmers, rice mills and rice producers.

"The police may enforce the law, but they must not act inappropriately (meaning too aggressively, red) as it may decrease the confidence of investors. Now, rice producers are doubting to sell their rice above 9,000 per kilogram (kg). Yet, there are no regulation that forbids them to set such price," Iwantono said, Jakarta, Friday (28/7).

In addition to accusing the company of buying unhusked rice above the government’s maximum limit, the police is also saying that PT Indo Beras Unggul is monopolizing prices.

"The Purchase Principal Price (HPP) is the benchmark price set by the State Logistics Agency (Bulog) for rice from farmers. If the company buys rice at Rp3,900 per kilogram lower than the benchmark price, Bulog would be able to benefit from buying the rice. If the company buys the rice above the benchmark price, the government should be happy as the company is acting as a good buyer," Sutrisno said.

Sutrisno also revealed that some government institutions are showing lack of understanding on their primary tasks and functions (tupoksi). For instance, it was the Ministry of Agriculture who reported to the police about the possible price violation. Yet, such action should fall into the responsibility of the Ministry of Trade.

"It was the Ministry of Trade who issued the regulation," he said.

Furthermore, the accusation that PT Indo Beras Unggul placed misleading labels on its packages should be from the Food and Drugs Supervision Agency (BPOM). However, in the raid, no BPOM representatives were present.

"Then there’s the Business Competition Supervisory Commission (KPPU), who declared that they want to regulate commercial activities in the rice industry. Who is KPPU? They are not regulators.Their primary tasks and functions are to supervise business competition. Don’t attempt to intervene just because ‘the issue is sexy. We demand all government institutions to return to their primary tasks and functions," he said.

Apindo Chairman, Hariyadi Sukamdani, said investors are upset over the overexposure.

"Go ahead and enforce the law, but don’t overexpose the case. Not must has been proven, but the case is already being exposed," he said.

CLOSED MEETING – Meanwhile, PT Indo Beras Unggu (IBU) on Friday (28/7) visited the Indonesian Consumers Protection Foundation (YLKI) for about one hour.

YLKI Acting Chairman, Tulus Abadi, said the rice producers wanted to meet as they provide technical explanations that concerned the accusations.

The company explained that there are no regulations on labeling of rice products.

"The Ministry of Agriculture has not issued any regulation on labels of rice nutrition contents," Tulus said.

Second, the company denies the accusation that it has been adulterating non-subsidized rice with subsidized rice. They explained that it has been adulterating the rice grains. "It may be hard to prove the adulteration accusation as the rice grains have been adulterated by the farmers and this has become common," Tulus said.

Third, concerning the rice quality. PT Indo Beras Unggu said their Maknyuss and Cap Ayam Jago rice brands have obtained the Indonesian National Standard (SNI) certificate. The certificate was not obtained for the nutrition contents, but instead for the physical condition of the rice grains, such not having unpleasant odor and free from rice flees.

The fourth topic concerned the overly high price. The company explained that there is no such thing as ‘premium rice’ and there many rice products that are more expensive than the products that the company sells.

And fifth, on the accusation that the company is controlling the market, PT Indo Beras Unggu said it cannot explain to YLKI yet as they need to bring in their marketing team. The team that met the foundation was the technical team. (dtc)